Why Abiomed Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Abiomed (NAS: ABMD) , a manufacturer of medical devices focused on the heart, rose just over 10% this morning following the company's fourth-quarter earnings results.

So what: For the quarter, Abiomed reported a huge jump in sales (43%) for its lead product, the Impella implantable heart pump, which helps patients' hearts recover from surgery or severe trauma. Total revenue for the quarter rose 31% to $37.3 million with the company reporting a profit of $0.06 per share. Although profit only met Wall Street's expectations, sales surpassed the consensus figure by $2.3 million. This also marked the first time in 15 years that Abiomed has reported an annual profit ($0.04 in EPS) -- better late than never, right?

Now what: Even though Abiomed didn't give specific earnings guidance, it did note in its report that sales growth should be in the 20%-25% range, or $152 million-$157 million. This is also ahead of the current $150.5 million consensus on Wall Street. But we have to ask ourselves if it's worth getting exuberant over a company that took 15 years off between turning a profit. I like the product pipeline and the sales potential is absolutely there, but it's going to take a lot more to get me to give Abiomed two thumbs-up than a $0.04 annual profit.

Craving more input? Start by adding Abiomed to your free and personalized watchlist so you can keep up on the latest news with the company.